Itxa/1481/2016 Of Commissioner Of Income Tax-Tds-2 v. Saifee Hospital

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1478 OF 2016WITH INCOME TAX APPEAL NO.1481 OF 2016WITH INCOME TAX APPEAL NO.352 OF 2017 Commissioner of Income Tax-TDS-2… Appellant V/s. M/s Saifee Hospital … Respondent --- Mr.Suresh Kumar for the Appellant.Ms.Aasifa Khan for the Respondent. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : MARCH 6, 2019. P.C.:- 1.These three Appeals under Section 260-A of the IncomeTax Act, 1961 (the Act), challenge a common order dated 29[th]January, 2016 passed by the Income Tax Appellate Tribunal (theTribunal). The impugned order inter-alia disposes of appealsrelating to Assessment Years 2008-09, 2009-10 and 2010-11.Therefore, these three appeals. Priya Soparkar 2.All these appeals raise the following identical questions of law for our consideration: “(a) Whether on the facts and in the circumstancesof the case and in law, the Tribunal is correct inholding that the Payments made by the assesseefor services rendered by the supplier formaintenance of medical equipments is not liablefor deduction under Section 194J, withoutappreciating that the services received by assesseeare technical and managerial in nature? (b) Whether on the facts and in the circumstancesof the case and in law, the Tribunal is correct inholding that the Payment made to M/s MonginisHospitability Services Pvt. Ltd. are payments forwork contract covered under Section 194C and notfees for technical services under Section 194J,without appreciating that the services received byassessee are technical and managerial in nature? (c) Whether on the facts and in the circumstancesof the case and in law, the Tribunal was correct inaccepting the claim of the assessee that tax was notdeductible on 75% of actual payments made to theDoctors under Section 194J of the Act as only25% of the total amount paid by the patient wererouted through the Hospital and 75% of the actualpayment were recovered directly from the patientby the Doctors? (d) Whether on the facts and in the circumstancesof the case and in law, the Tribunal was correct indeleting the demand us 201(1A) of the Act withoutappreciating the fact that in the case of Hindustan Coca Cola Beverage Pvt. Ltd. it was clearlymentioned that "this will not alter the liability tocharge interest under Section 201 (1A) of the Acttill the date of payment of taxes by the deductee-assessee? (e) Whether on the facts and in the circumstancesof the case and in law, the Tribunal was justified inrejecting the order of the Assessing Officer byholding that the assessee is not in default underSection 201(1) in respect of the amount of taxwhich has not been deducted from the paymentsmade under the required sections and that theassessee is not liable for levy of interest undersection 201(1A)?" -3. Re.Question No.a (a)The impugned order of the Tribunal dismissed theRevenue's appeal seeking deduction of tax at source under Section194J of the Act in respect of services rendered for maintenance ofmedical equipment. The impugned order of the Tribunal whiledismissing Revenue's appeal placed reliance upon its order dated16[th] September, 2015 in respect of the same respondent-assesseefor the assessment year 2011-12. In the above order, it was heldthat the services which are rendered for maintenance ofequipment would not be in the nature of technical services. Theseservices being of routine nature, would not be qualified to be Priya Soparkar48 itxa 1478-16, 1481-16 and 352-17-o-scalled technical services which would require deduction underSection 194J of the Act. Purpose of this services was only toensure a proper maintenance of the machinery/equipment so asto ensure long life for the same. Priya Soparkar48 itxa 1478-16, 1481-16 and 352-17-o-scalled technical services which would require deduction underSection 194J of the Act. Purpose of this services was only toensure a proper maintenance of the machinery/equipment so asto ensure long life for the same. (b) We note that Commissioner of Income Tax (Appeals) as wellas the Tribunal have on facts come to the conclusion that theservices rendered in respect of the equipments are only in natureof maintenance services provided to ensure they function properlyand would be able to provide services for a long period of time.This does not involve any technical service. These concurrentfindings of the fact has not been shown to be perverse. (c)Therefore, the question as proposed does not give rise toany substantial question of law. Thus, not entertained. 4. Re.question Nos.b,c,d and e. (a)It is agreed position between the parties that these questionsare identical to those urged in Income Tax Appeal No.1425 of2016 in respect of the same respondent-assessee relating to theassessment year 2011-12. We have today by a separate orderdisposed of the above appeal of the revenue holding that the Priya Soparkar58 itxa 1478-16, 1481-16 and 352-17-o-squestion Nos.b and c as proposed do not give rise to anysubstantial question of law and question Nos.d and e havebecome academic in view of question Nos. b and c not beenentertained. (b)In the above view, these questions do not give rise to anysubstantial question of law for the reasons indicated in our orderpassed today in Income Tax Appeal No.1425 of 2016. Thus, notentertained. 5.Appeals dismissed. No order as to costs. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)….